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Obama to Outline Deficit Reduction Proposal

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Updated: 1:05 p.m.

With a government shutdown averted, President Barack Obama will pivot to a broader fiscal outlook this week by detailing a spending reduction plan that would address politically popular entitlement programs, a senior White House adviser said Sunday.

Obama is going to be clear about the type of deficit reduction we need in terms of dollar amounts, over what period of years, David Plouffe said on CNNs State of the Union in one of several morning news show appearances that he made Sunday. He believes we need significant deficit reduction in the coming years, and thats what hes going to speak to this week.

The presidents plan will be offered as a response to a fiscal 2012 budget proposal that House Republicans unveiled last week. House Budget Chairman Paul Ryan (R-Wis.) put forth a proposal Tuesday that would include drastic cuts and alterations in Medicare and Medicaid.

Future fights over the next fiscal years budget, as well as whether to raise the debt limit this spring, are expected to dwarf the recent dispute over this fiscal years spending. Obama and Congressional leaders agreed Friday to $38 billion in budget cuts for fiscal 2011, and Congress cleared a weeklong spending stopgap early Saturday morning to avert a government shutdown and give lawmakers time to consider and vote on the compromise plan. The compromise does not include a number of policy changes sought by Republicans, including eliminating federal funding for family planning programs.

The president will outline his deficit reduction plan in a speech this week, possibly Wednesday or Thursday. Although Plouffe did not offer details Sunday, he said Obama will discuss proposals for Medicare and Medicaid and address the long-term viability of Social Security.

You are going to have to look at savings you might be able to get in Medicare and Medicaid in the long term, Plouffe said on State of the Union. He added that while Social Security is not a short-term contributor to the deficit, we ought to look if there is a way to strengthen Social Security in the long term that doesnt endanger anybody, you know, whos a current beneficiary and doesnt slash benefits.

The president believes in a balanced approach that includes federal investment in such areas as education and research, Plouffe said.

We need to take a scalpel, not a machete, he added. We need to take a balanced approach to this that allows us to win back the future.

The presidents plan would also look at defense spending and revenues, including reconsidering existing tax cuts for wealthier people.

Republican leaders expressed skepticism about Obamas seriousness.

For the last two months, weve had to bring the president kicking and screaming to the table to cut spending, House Majority Leader Eric Cantor said on Fox News Sunday.

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